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Sophiris Streamlines Operations, Weighs Options on Prostate Drug

single injection of topsalysin reported a statistically significant improvement in their BPH symptoms. As Sophiris reported in November, topsalysin also demonstrated a favorable safety profile, with no evidence of any treatment-related sexual or cardiovascular side effects.

The primary endpoint of the “Plus-1” study was based on the questions that make up the International Prostate Symptom Score (IPSS). It showed the topsalysin-treated patients reported an overall 7.6 point improvement in their IPSS scores over a 52-week period.

For cancer patients, the method of injecting the drug into the prostate would be the same, aided by advanced 3D imaging that enables doctors to guide the needle more precisely into tumorous prostate cells. The drug acts in the same way, with PSA produced by cancerous prostate cells converting proaerolysin into a toxin that causes cancerous cells to rupture.

The encouraging results of both studies have Sophiris at something of a crossroads, with a single biologic drug candidate that could qualify in two different therapeutic categories. As Woods puts it, “The fact that we’re talking about one drug with two indications means that we get two shots on goal.”

Before Sophiris could seek FDA approval for topsalysin as a treatment for BPH, however, the company would have to complete a second Phase 3 clinical trial. To advance the biologic as a potential drug therapy for prostate cancer, Woods says the next step would require another Phase 2 clinical trial with a larger cohort.

As a first-in-class therapy for BPH, which is first in the pipeline, Woods says topsalysin would be positioned as an alternative to minimally invasive surgical techniques after a patient has discontinued standard oral medications.

As a treatment for localized prostate cancer, Woods says topsalysin would likely compete against procedures such as high-focused ultrasound and cryotherapy.

Earlier this month, Sophiris raised net proceeds of $4.6 million from a secondary public offering of its common shares and warrants. Woods says the additional capital, combined with the $8.4 million in working capital and cash equivalents Sophiris had at the end of March, will give the company sufficient funds to operate for at least another 12 months.

Sophiris also hired Oppenheimer & Co to help the company evaluate its strategic alternatives for advancing topsalysin, including partnering with a big pharma, financings, or a possible buyout.

Woods notes that the timing couldn’t be much better. While Sophiris takes a pause to consider its options, San Francisco-based Medivation (NASDAQ: MDVN), maker of the prostate cancer drug enzalutamide (Xtandi), has reportedly attracted interest from Pfizer after rejecting a $9.3 billion takeover bid from Sanofi. With Amgen, AstraZeneca, and Novartis also rumored to be interested in acquiring Medivation, the situation could turn into a bidding war, and perhaps boost Sophiris’s value in a buyout deal.

That notion, however, struck the Maxim Group’s McCarthy as wishful thinking. “I don’t think Sophiris would get taken out at this stage,” said McCarthy. A buyout might be possible, but the biotech analyst said it’s unlikely the company would get the kind of valuation it’s looking for.

“The bounceback in valuation never occurred,” McCarthy said. “For us, it was an issue of timing. The market was terrible at that time.”

In addition to finishing its prostate cancer trial, Sophiris reported last week that it has laid off half its staff, from 10 to five, which is intended to reduce expenses. “I wouldn’t read too much into that,” McCarthy said.

“The idea here is not to close the door on any opportunities,” Woods says, “but to really assess the best path forward with Oppenheimer’s help.”